June 7 (Bloomberg) -- Four years ago, Wendy Atkinson Navarro, 36, had a job, a husband and a home. Now, she is divorced, out of work and living with her mother near Madrid, a casualty of Spain’s recession that has driven unemployment above 24 percent and is unnerving young people.
“My self-esteem is a mess,” Atkinson said. “My nephew is 15 years old, and the only difference between him and me is I have kids. That’s how I feel.”
More than 4 million Spaniards are jobless in a double-dip recession that is hitting young people hardest. More than half of 15-to-24 year-olds are unemployed, and 37 percent of those 25 to 34 live with their parents. Rather than starting families and building careers, many young people spend their days playing video games and watching television. As their skills stagnate, they risk falling behind permanently, said Katherine Newman, a sociologist and dean at Johns Hopkins University in Baltimore.
“For the rest of their lives, they’re damaged,” said Newman, who has written about labor and families in Spain. “They don’t recover occupationally, their earnings are depressed for 20 years, they don’t marry at the same rate.”
Joblessness, combined with the destruction of household savings, “tears the social fabric apart,” she said.
Pepe de Uriarte, 32, an unemployed publicist in Madrid, spends his days looking for jobs online, preparing gazpacho, playing golf and watching television. He has memorized the afternoon broadcast schedule and calls himself “president of the TV watchers’ club.” If he doesn’t find another job before his 1,000 euro-a-month ($1,200) unemployment insurance runs out, he said he may end up moving in with his parents.
Like many young Spaniards, de Uriarte has never had a permanent job, instead signing temporary contracts that have ranged from two days to 10 months.
“I am still a little bit like Peter Pan, because I can’t plan,” he said. “I stopped my life when I was 25 years old. I can’t set up a family, I can’t buy a house, I can’t do anything.”
Spain’s system of temporary job contracts is at the root of its record unemployment, which is more than double the average of the 27 countries in the European Union, said Juan Dolado, an economics professor at the Carlos III University in Madrid.
Temporary contracts were created in the 1980s as a way for employers to avoid signing workers to permanent, full-time agreements, which required 45 days of severance pay for every year worked. Because temporary employees received only eight days’ severance, companies preferred workers on short-term contracts and, by 2007, they made up 33 percent of the Spanish workforce, Dolado said.
More than half of Spaniards who lost jobs had temporary contracts, and most of them were under 40, Dolado said. Labor law reforms passed in February reduce the mandatory severance to 33 days for permanent contracts and, over time, will increase the required severance pay for temporary contracts, he said.
By making it easier to fire workers, employers will eventually be more inclined to hire them, Dolado said.
Pablo Vega Gonzalez, 28, has been unemployed since March, when his temporary job as a video-game tester for Electronic Arts Inc. wasn’t renewed. Since then, he traveled to Dusseldorf, Germany, to interview at Ubisoft Blue Byte, another video-game company, and was one of more than 200 people who applied for 20 cashier positions at a new supermarket. He was rejected by both employers.
“Feeling useless is very depressing,” Vega said. “When people say, ‘Pablo, that’s life,’ it doesn’t make me feel better. I don’t feel better because everyone else is unemployed.”
Vega, who studied labor law and human resources at the Complutense University of Madrid, has never had a permanent job and envies former classmates that do.
“They are my friends, and I wish them well but you wonder why they have a job and I don’t,” said Vega, who lives at home with his two brothers and mother, a widowed pharmacist who cooks for them. Vega said he contributes to the household expenses when he can.
While most of his friends are living at home, “it’s very frustrating,” he said. “If you meet a girl, you hope she has a job and a flat. It’s difficult.”
The crisis in youth unemployment was exacerbated by the collapse of Spain’s once booming construction industry, which lured young people out of school for wages of 2,500 euros a month, said Fernando Fernandez, an economist at IE Business School in Madrid. Now, they’re back with their families, waiting in vain for another job that will pay that well, he said.
“They expect to get a job that is comparable and there is no way,” he said. “There’s a problem with expectations. You cannot expect to have no education and get those wages.”
Spain’s unemployed risk being permanently tainted in the eyes of employers if they are jobless for years, said Newman at Johns Hopkins.
“Their skills get outmoded, their qualifications are weak and they look really aberrant to employers,” Newman said.
More than 70,000 Spaniards took to the streets May 12-13 in protest of joblessness and cuts to social programs. The march was on the anniversary of a 2011 occupation of Madrid’s Puerta del Sol, the central downtown square, that lasted for weeks. People are angry that the government is slashing spending on education and health care while Bankia SA, the lender Spain nationalized on May 9, is asking for a 19 billion-euro bailout, de Uriarte said.
“Banks and politicians made us think the economy was very solid, but it was all based on housing and construction,” he said. “We thought we were much more rich and powerful than we were.”
Spain’s economy is forecast to shrink this year and unemployment will continue to rise as the government cuts spending and banks tighten credit, the European Commission said May 30.
The country, the fourth-largest economy in the 17-nation euro area, is struggling to cut its deficit and rescue a financial system crippled with bad debt. Its banks are holding 184 billion euros worth of “problematic” loans and assets, according to the Bank of Spain, or 60 percent of all commercial Spanish real-estate debt.
Atkinson, whose father is English, has lived all her life in Spain. She was fired in 2010 from her job at LaSexta, a television station where she worked as an administrative assistant. She went back to school to become a nursery school teacher, got divorced and, with her two children, moved in with her mother, stepfather, brother and brother’s girlfriend in April after her unemployment benefits ran out.
Atkinson has failed to find a part-time job and is planning on selling her station wagon. Her mother has supplied her with a credit card for expenses and gives her instruction on how the household runs.
“Now we have discussions about how to set the dishwasher,” Atkinson said. “My son said, ‘You’re not in charge, your mother is in charge.’ It hurts.”
Her brother is planning on moving to Helsinki to open a Spanish wine store with his Finnish girlfriend, and Atkinson worries that her children will also one day leave Spain for better opportunities
“I don’t want my kids to go away,” she said. “But I don’t know how the future is going to be.”
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